Mr Rajoy has become the latest European politician to call for countries to, in effect, abandon their sovereignty in a last-ditch attempt to save the beleaguered currency

Mr Rajoy said a new central authority would go a long way to alleviating Spain’s economic crisis as it would send a clear signal to investors that the single currency is an irreversible project.

He said: “The European Union needs to reinforce its architecture. This entails moving towards more integration, transferring more sovereignty, especially in the fiscal field.

“And this means a compromise to create a new European fiscal authority which would guide the fiscal policy in the eurozone, harmonise the fiscal policy of member states and enable a centralised control of [public] finances.”

Mr Rajoy is not the first to propose creating such an authority but the fact that Spain – a country deemed too big to fail – is backing the move may now accelerate talks.

Its set-up would require a change in the European Union treaties, a usually lengthy process that requires ratification in the 27 member states of the bloc, including those such as the UK which do not use the euro.

Germany, the de facto guarantor of the euro, has said further integration in Europe was required, including additional controls on national public finances. Angela Merkel, the German chancellor, said there should be no taboos when discussing such issues.

Last week Mario Draghi, the president of the European Central Bank, said the ECB could not “fill the vacuum of the lack of action by national governments on the structural problem” and that countries needed to give up some of their sovereignty.

Separate plans put forward by France could see Britain facing a bill for another £1bn “backdoor” bail-out to recapitalise the European Investment Bank (EIB).

French President Francois Hollande has been pushing for the European Union’s 27 members to inject €10bn into the EIB to fund infrastructure projects as part of a plan to revive growth in the region.

The proposal has won broad support among the international community, including the UK, where the Prime Minister’s spokesman has said: “We are open-minded about looking at how the EIB can support infrastructure investment.”

If the proposal is agreed, which would increase the EIB’s lending capacity from €450bn to as much as €550bn, the UK would be on the hook for 16pc of the new money, or £1bn.